Look to local organizations and build pipeline of news, say IR experts
This article was produced in association with ELITE Connect. It was originally published on the ELITE Connect platform.
Managing a proactive IR function in remote regions can be a tricky business. Notwithstanding the obvious geographical travelling constraints, issues such as smaller-sized IR teams, safety fears in volatile areas and reduced budgets can all negatively affect IR practices when compared with better-known regions.
Despite these challenges, there are many ways IROs can attract and maintain investor attention and, as Clémence Piot, general manager for the Middle East Investor Relations Association, observes, many countries have already stepped up to the challenge.
‘One of the best starting points for companies in remote regions is to get in touch with their local IR society with a view to setting up a local chapter,’ Piot suggests. ‘We saw this take place in Palestine, which established a chapter in 2012, demonstrating the engagement of the stock exchange and local companies to improve their IR practices and boost engagement with investors.’
A fundamentally important way remote-region IROs can boost their effective IR engagement is by realizing the value of ‘good news’ and the best way to disseminate these stories and results, as Redwan Ahmed, IR director for Dubai-based DP World, notes: ‘Each business needs to have a good equity/debt story to tell. IROs should also be aware of the macro factors that affect their region: being well prepared with a positive story always grabs attention and provides significant credibility to the buy side.’
Digital technology is also crucial, according to Piot, especially in areas affected by current or historic conflict or instability. ‘The most difficult challenge in these outside regions that are, or have been, affected by volatility, is to attract investors on-site and to show them that not everything in the media should be taken as a given,’ he says.
‘Not everywhere is a warzone and the vast majority of places are safe with good working economies. For these areas in particular, digital technologies are crucial ‒ from simple measures such as ensuring they disclose and publish as much IR information as possible on their websites to the use of technology platforms to engage with potential investors.’
As with any region, remote or frontier, analyst engagement can also be a vital tool in an IRO’s plan. ‘Going the extra yard to help analysts with the key building blocks for the financial model always helps’ comments Ahmed. ‘Try to understand what the buy side and sell side ultimately want. If you can gather competitor data and offer additional analysis that conveys the story, that’s what will get the right attention.’
Mohammad Khraim, PR and investor education manager for the Palestine Securities Exchange, observes that persistence, good communications and strong management support are also necessary for IR success.
‘It’s important never to give up: our industry needs patience and if IROs show perseverance, they will be rewarded,’ he says. ‘Communication is also key ‒ staying in contact with existing and potential local and global investors via all means of communication really matters. Working closely with your management and obtaining its support and commitment to sharing the truth about your company, even in bad times, will mean IR is more effective.’
